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CNH Industrial maintains earnings despite market headwinds


Combine harvester-to-tractor maker CNH Industrial maintained its earnings outlook for 2019 despite “uncertainties in the agricultural end-markets”, spurred by poor weather and trade disputes.

The Milan-listed business, which makes Case and New Holland machinery, followed other ag groups - including rival equipment maker Agco and input providers such as BASF and Bayer – in cautioning over headwinds from the likes of the US-China trade dispute and dry European weather.

“Uncertainties in the agricultural end-markets related to the trade tensions remain unresolved, and negative impacts from recent weather events (in North America, Australia and Northern Europe) are persisting,” CNH said.

These factors have “impacted planting and harvesting patterns and market sentiment.”


Cyclical business stable


However, it noted too some reasons for optimism over prospects, saying that cyclical replacement demand remains stable, with used equipment inventories at low levels supporting new equipment sales in North America.

While the group trimmed its forecast for 2019 sales to $27-27.5bn, from about $28bn, largely due to currency factors, it retained its expectation of earnings per share of between $0.84-0.88.

Shares in CNH International rose 1.4% to $9.302 in late trading.


Ag profits down

The comments came as the group unveiled adjusted operating profits in agriculture down 13.9% at E341m for the April-to-June quarter, on revenues down 6.6% at $3.10bn.

“Agriculture’s net sales decreased… due to lower sales volume in Europe and Rest of World, partially offset by positive price realisation performance across all geographies,” the group said.

Overall sales for CNH, which also serves markets including construction, powertrain and commercial vehicles, came in at $7.57bn, with adjusted earnings of $430m, up 8.3%.

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